Google Buys Nest, Spends $3.2 Billion on 'Smart Home' Device Maker

Google has announced a $3.2 billion deal to buy Nest Labs, a firm that has set out to try and improve everyday items around the home such as smoke alarms and thermostats.

The deal is also noticeable as it will see Google acquire the services of Tony Fadell, who worked at Apple until 2008, and was known as the "Father of the iPod" for his work on the revolutionary product.

The deal clearly positions Google as being ready for the new era of the 'connected home', and in a statement Google CEO Larry Page said the deal would help Google move into new areas that are ripe for innovation.

"Nest's founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family," he said. "They're already delivering amazing products you can buy right now – thermostats that save energy, and smoke and CO alarms that can help keep your family safe. We are excited to bring great experiences to more homes in more countries and fulfill their dreams."

Nest will remain under Fadell's leadership once the acquisition is completed, and he touted the deal as an ideal next step for Nest Labs.

"We're thrilled to join Google. With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world," said Fadell.

Forrester analyst Frank Gillett said the deal proved that the idea of the connected home was taking off and that Google was keen to take control of the entire product ecosystem.

"It shows that Google increasingly believes in hardware and software solutions, such as Nest has built, rather than just building operating systems for other manufacturers to implement in smartphones, Chromebooks, and TVs," he said. "Google will open up the somewhat closed approach that Nest used to date, to better integrate with interoperable smart home solutions that have entered the market in the last year."

The deal is subject to the normal regulatory oversights and is expected to be closed in the next few months, according to Google.

About the author

Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal.

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